Domino's Warns Of Loss In International Business

Domino's Pizza has warned of a loss in its international business this year.

"Internationally, performance remains disappointing and trading visibility is limited," CEO David Wild said, adding that the company would tighten its focus on international costs and capital deployment.

Ireland And The UK

Ireland and the UK account for 90% of the company's business and helped power a 4.5% rise in group sales to £324.4 million in the first quarter of 2019.

Sales for Britain and Ireland rose 4.8% to £299.3 million.

Other Markets

But the company has been focussing on its online and overseas businesses where it has struggled to control costs, especially in Norway, where it is converting the Dolly Dimple stores acquired in 2017.

International sales fell 2% to £25.1 million, Domino's said, as it began cutting costs and spending in operations that also include Sweden, Switzerland, Germany, Luxembourg and Iceland.

Negotiating With International Franchisees

The company, which had said in March that it expected its international operations to break even, has also been negotiating with international franchisees on terms.

Analysts have said the company's investment in its international operations runs into hundreds of millions of pounds, while the business has not made money.

Forecast

"DOM's track record overseas is not good. If it cannot run these countries profitably, then other master franchisees may think they can do better," Peel Hunt analysts said.

They cut their 2019 pre-tax profit forecast by £5 million, assuming its international operations lose £6.4 million versus a previous loss forecast of £1.4 million.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.